Automatic Data ProcessingXTER:ADP -0.15%87 Interest Coverage is 22.69 as of Mar. 2026, which is 16% below its 10-year median of 27.12. GuruFocus rates XTER:ADP with a GF Score™ of 87/100 and a GF Value™ of €265.32 (Modestly Undervalued). The stock has 2 warning signs investors should review. Among 1,707 Software companies, Automatic Data Processing ranks worse than 61.75% on this metric.
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's
Operating Income
by its Interest Expense. Automatic Data Processing's
Operating Income
for the
three
months ended in Mar. 2026 was €1,544 Mil. Automatic Data Processing's Interest Expense for the
three
months ended in Mar. 2026 was €-68 Mil.
Automatic Data Processing's interest coverage for the quarter that ended in Mar. 2026 was 22.69.
The higher the ratio, the stronger the company's financial strength is.
The historical rank and industry rank for Automatic Data Processing's Interest Coverage or its related term are showing as below:
XTER:ADP'
s Interest Coverage Range Over the Past 10 Years
Min: 11.87 Med: 27.12 Max: 55.69
Current: 12.67
XTER:ADP's Interest Coverage is ranked worse than 61.75% of 1707
companies
in the Software industry
Industry Median: 24.65
vs XTER:ADP: 12.67
Automatic Data Processing (XTER:ADP) Interest Coverage Explanation
Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.
Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .
Automatic Data Processing Interest Coverage Related Terms
Automatic Data Processing Interest Coverage Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.
XTER:ADP vs SNOW, DDOG, INTU: Interest Coverage Comparison
For the Software - Application subindustry, Automatic Data Processing's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Automatic Data Processing Interest Coverage vs Software Industry
For the Software industry and Technology sector, Automatic Data Processing's Interest Coverage distribution charts can be found below:
* The bar in red indicates where Automatic Data Processing's Interest Coverage falls into.
Automatic Data Processing Interest Coverage Calculation
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Automatic Data Processing (XTER:ADP) has a Interest Coverage of 22.69 as of Mar. 2026. Interest Coverage measures a company's capability to pay interest expenses on its debt. View historical data on Automatic Data Processing and its competitors. This is 16% below median its historical median of 27.12. Over the past decade, Automatic Data Processing's Interest Coverage has ranged from 11.87 to 55.69. According to the industry distribution chart, Automatic Data Processing ranks #1054 out of 1707 companies in the Software industry, placing it in the top 61.7%.
Is Automatic Data Processing's Interest Coverage too high?
Automatic Data Processing's current Interest Coverage of 22.69 is 16% below median its 10-year median of 27.12. Over the past 10 years, this metric has ranged from a low of 11.87 to a high of 55.69. The Software industry median Interest Coverage is 24.65. Automatic Data Processing's value of 22.69 is 8% below this industry median. Based on the distribution chart, Automatic Data Processing ranks #1054 out of 1707 companies in the Software industry, which is below the industry midpoint. Overall, Automatic Data Processing has a GF Score™ of 87/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Automatic Data Processing's Interest Coverage compare to SNOW and DDOG?
According to the Software industry distribution chart, Automatic Data Processing ranks #1054 out of 1707 companies for Interest Coverage. This places Automatic Data Processing in the lower half of its industry. The industry median Interest Coverage is 24.65. Automatic Data Processing's value of 22.69 is 8% below this benchmark. Historically, Automatic Data Processing's own Interest Coverage has ranged from 11.87 to 55.69 over the past decade. While the company's 10-year median is 27.12 vs. the industry median of 24.65, Automatic Data Processing has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Interest Coverage for a Software company?
The median Interest Coverage among Software companies is 24.65, based on 1,707 companies in the industry. Companies in the top quartile (top 25%) have a Interest Coverage significantly above this median, while those in the bottom quartile fall well below. However, Interest Coverage should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Automatic Data Processing's current Interest Coverage of 22.69 is 8% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Interest Coverage mean?
A high Interest Coverage can signal that a stock is expensive relative to its fundamentals. Interest Coverage measures a company's capability to pay interest expenses on its debt. View historical data on Automatic Data Processing and its competitors. For the Software industry, the median Interest Coverage is 24.65 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Automatic Data Processing's current Interest Coverage is 22.69, which is 16% below median its own 10-year median of 27.12. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Automatic Data Processing stock overvalued right now?
Based on GuruFocus' analysis, Automatic Data Processing (XTER:ADP) is currently considered Modestly Undervalued. The stock's GF Value™ is €265.32, compared to a current price of €195.08 — trading 26.5% below its estimated fair value. The current Interest Coverage is 22.69, which is 16% below median its 10-year median of 27.12 and 8% below the Software industry median of 24.65. Automatic Data Processing's overall GF Score™ is 87/100 with 2 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Interest Coverage calculated?
Interest Coverage is calculated from a company's financial statements. For Automatic Data Processing (XTER:ADP), the current Interest Coverage is 22.69 as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Automatic Data Processing (XTER:ADP) Overvalued in 2026?
Based on GuruFocus' analysis, Automatic Data Processing stock appears to be undervalued.
The current stock price of €195.08 is trading 26.5% below its estimated GF Value™ of €265.32.
GuruFocus considers Automatic Data Processing to be Modestly Undervalued.
Key valuation signals for XTER:ADP:
Interest Coverage: 22.69 (16% below median its 10-year median of 27.12)
GF Value™: €265.32 vs. price of €195.08 (26.5% below fair value)
Industry Position: 8% below the Software median (#1054 of 1707)
No single metric tells the full story. See the XTER:ADP stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Automatic Data Processing, or ADP, is a global, cloud-based human capital management provider offering payroll, compliance, talent management, benefits administration, and retirement services. The firm also provides HR outsourcing services, including PEO offerings, enabling clients to reduce HR overhead. Its broad suite serves customers of all sizes across diverse sectors, and the firm holds large market shares in its core markets. As of fiscal 2025, ADP counts over 1.1 million clients and manages payroll for more than 42 million workers across 140 countries.
87GF Score
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